Assortative Marriage and Geographic Sorting

TL;DR

This paper develops a spatial equilibrium model to analyze the rise in geographic and educational sorting in the U.S. from 1980 to 2000, revealing its significant impact on household inequality and well-being gaps.

Contribution

It introduces a novel spatial equilibrium model with marriage matching to quantify the effects of sorting on inequality and welfare.

Findings

Geographic and educational sorting increased significantly from 1980 to 2000.

Marital preferences and sorting jointly amplified household inequality.

Welfare analysis shows the college well-being gap grew more than the wage gap.

Abstract

Between 1980 and 2000, the U.S. experienced a significant rise in geographic sorting and educational homogamy, with college graduates increasingly concentrating in high-skill cities and marrying similarly educated spouses. We develop and estimate a spatial equilibrium model with local labor, housing, and marriage markets, incorporating a marriage matching framework with transferable utility. Using the model, we estimate trends in assortative preferences, quantify the interplay between marital and geographic sorting, and assess their combined impact on household inequality. Welfare analyses show that after accounting for marriage, the college well-being gap grew substantially more than the college wage gap.